Use the following statements to answer this question: I.Under the dominant firm model,the dominant firm effectively acts like a monopolist who is facing the excess market demand that cannot be supplied by the fringe firms.
II.If the fringe supply curve shifts leftward in the dominant firm model,then the resulting market equilibrium price is __________ and the dominant firm's quantity __________.

Question

Quizplus · Accepted Answer

When the fringe supply curve shifts leftward, it indicates a decrease in the supply from fringe firms. This leads to an increase in the market equilibrium price, allowing the dominant firm to increase its quantity supplied to meet the excess demand.

Use the Following Statements to Answer This Question: I